ethereum founder Vitalik Buterin this week presented an innovative proposal aimed at perfecting the platform’s staking mechanism.
As the world’s second-largest blockchain by market capitalization, ethereum‘s continued evolution is crucial to its broad user base, and these proposed changes aim to bolster decentralization, efficiency, and security.
A decentralized vision for betting
The main concern addressed in Buterin’s proposal revolves around the limitations of the current betting system.
In particular, it points out decentralization issues surrounding the node operator selection process across various staking pools and identifies inefficiencies in the current Layer 1 (L1) consensus mechanism.
Currently, the limitations of individual bets combined with the issues related to liquid bets mean that the platform can only process between approximately 100,000 and 1 million BLS signatures per slot.
An additional complication arises from the need for accountability when signing, which requires a record of participation for each signature. If ethereum grows globally, the full use of danksharding for storage could still fall short, with only 16 MB per slot accommodating around 64 million participants.
Inspired by the models implemented by Rocketpool and Lido, Buterin suggests adopting a two-tier betting system. In this structure, Node Operators and Delegators emerge as central figures.
To rectify this, Buterin suggests a two-tier betting model:
- A reducible level of high complexity with frequent activity but limited participants (around 10,000).
- A low complexity level, where members participate sporadically and face little or no outage risk.
This model would involve modifying the validator balance limit and implementing a balance threshold to categorize validators into these tiers.
Buterin explains the possible roles of the little participants:
- Random selection of 10,000 small bettors for each slot machine who sign in the head of their slot machine. If divergences arise between the choices of the participant and the node operator, an error is generated, prompting community intervention.
- A system in which a delegate declares his or her online presence and offers to act as a small participant for a specified period. For a node’s message to be acknowledged, support from both the node and a randomly chosen delegator is needed.
- An approach where delegates signal their availability and then elected delegates confirm their online status. These delegates can then publish include lists for block validation.
The roles provided for small participants are characterized by their sporadic participation and their non-cuttable nature. Importantly, these roles address the important issue of a potential 51% majority of node operators attempting to censor transactions.
Buterin also views these solutions in the context of the betting group’s functions. He suggests protocols that allow validators to designate two staking keys: a persistent key and a temporary key that, when combined, influence the block completion process.
The implications
Buterin’s proposal is not just technical solutions; It is a vision for the future of ethereum. By further decentralizing the participation process and integrating safety networks, your goal is to:
- Empower those who lack the resources to gamble alone by giving them meaningful avenues for participation.
- Reduce the transaction processing load on the ethereum consensus layer, making it easier for everyone to run a validator node.
By spreading the participation process and incorporating safeguards, the objectives are clear: to empower those who traditionally lack the means to place bets alone, offering them a meaningful way to participate and alleviate the strain of processing transactions at the consensus layer of ethereum. This ensures a more accessible platform for all those wishing to run a validation node.
The proposed improvements underscore the pressing need for minimal, strategic protocol modifications, all pointing toward a balanced, decentralized, and high-functioning ethereum network.
